James Hardie Industries PLC

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

James Hardie Industries PLC (ASX: JHX) is engaged in producing and marketing high-performance fiber cement siding and backerboard. The company has four operating segments, namely, (1) North America Fiber Cement, (2) Europe Building Products, (3) Asia Pacific Fiber Cement and (4) Research and Development.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~42.53% of the total shareholding. AustralianSuper and Pinnacle Investment Management Group Ltd are holding a maximum stake in the company at ~6.97% and ~5.38%, respectively.

1.4 Key Metrics: In FY22, JHX recorded an ROE of 38.4%, compared to the year-ago period of 25.1%. The operating margin for the period stood at 18.9%, higher than the year-ago period figure of 15.8%. The below picture depicts the gross margin and EBITDA margin trend since FY19.

Section 2: Financial Highlights

2.1 Results Highlights of FY22 (Period Ended 31 March 2022): In 4QFY22, the company delivered a Price/Mix growth in North America (up +12%), Europe (up +14%) and the Asia Pacific (up +11%), supported by continued operational improvement across all the three regions.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.

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